WSL_HAS2010-MegaTrends_Sample

For 20 years, How America Shops® forward-thinking research

has successfully predicted shopper attitudes and behaviors,

new channels and developing categories.

This 2010 edition will help you successfully navigate

your odyssey to the new retail world.

“The great recession” has changed the future of retail. It has brought to an end one of the most transformational decades in history - our social, political and economic history, and, yes, our shopping history.

Now! new white spaces emerge. Prepare to begin a journey into the unknown. An odyssey of almost mythic Greek proportions. Navigating your business through the obstacles will be stormy…but less so if you follow shoppers into the future.

This recession wasn’t the beginning of a behavioral shift, it was the conclusion.For years shoppers intended to de-clutter, live simple and spend less.But, it took the financial crash to make that happen.

How America Shops® MegaTrends 2010 will be your guide to: » Shopper sectors that will re-shape retail » The passing of “channels” » Pillars of retail that will decline/disappear » Categories that will re-shape every aspect of the store (What is a store, anyway?)

Be alert to the hurdles as you navigate your odyssey into the new retail world.

04

defining the future of the retail world... Since 1986, WSL/STRATEGIC RETAIL has helped global clients build smart shopper strategies for today, and envision tomorrow. Our insightful understanding of shoppers, their behavior and the retail landscape leads our clients to success.

ExpEriEncE

RETAILERSavonBoots (uK)Bath & Body worksCharming Shoppes/lane BryantCVS/pharmacydisneyeBayedgars (South africa)general growth Properties

honey Baked hamJC PenneyJP Morgan/ChaseKate’s PaperieKohl’so Boticario (Brazil)rite aidhome Shopping networkSainsbury’s (uK)

Saks fifth avenueSephoratargetultaVictoria’s Secretwalgreenswalmartwegmans

MANuFACTuRERSamerican greetingsCampbell’sCondé nast PublicationsCotydiageodonna Karanenergizerestée lauderfirst Qualitygeneral Millsgillettegivaudanglaxo Smith Kline

goody Productshachette filipacchi Mediahallmarkhearst Publicationshelen Kaminski (australia)John Sands (australia) Johnson & JohnsonKraftl’oréalMattelMaybelline/garniernestlé nestlé Purina

neutrogenanewellPacific Brands limited (australia)PepsiCoPfizerPierre fabre (france)Procter & gamblerevlonS.C. Johnsontelescope Casual furnituretime inc.unilever

ASSOCIATIONSCewfMigdi

gMagMdCMPa

naCdSnaCSPlMa

05

new white SPaCeS eMergeBut first you must get through the dark days. Shoppers are not going back to their old ways. there is no “new normal” here, only uncharted shopping territory.You nEEd to bE opEn to changE not blindEd bY businEss as usual.

when will it end? economists were late to call it a recession and will be early to call an end to it. Shoppers believe their “personal recession” will linger way beyond the official one. count on 2 morE YEars of rEcEssion mindsEt. at lEast.

the end of ChannelSif it takes two or more powerful players to make a channel then there are no more channels. the future is about powerful retailers, and fewer of them. don’t jump to thE conclusion that it’s all about Walmart. shoppErs saY, “not so!”

the launCh of new retailthe odyssey means following shoppers where they really shop now - whether it’s amazon or aldi. You need to understand why and where they are going and where you fit.thErE’s a nEW shopping dEcision trEE. it’s not What it Was.

new ShoPPer SeCtorS = new oPPortunitieSdemographics have surprisingly little to do with shoppers’ recovery mindset. future shopping behaviors will be shaped by how badly or gently shoppers travelled through the recession. 5 shoppEr sEctors Will dEfinE futurE shoppEr opportunitiEs.

finallY health & wellneSS goeS MainStreaMforced to cut back on expensive take-out food and eating out, shoppers went back to home cooking, healthier lifestyles and the supermarket. now wellness goes beyond food. find Your WhitE spacE in thE nEW hEalth & WEllnEss movEmEnt

online ShoPPing defineS the new retail worldthe success story of the recession has been online shopping. no longer only for the rich or techies: now it’s smart and easy shopping for all -- and so many points of access. (Mobile shopping anyone?) no WondEr Walmart WorriEs about amazon. What about You?

W H AT Y O u W I L L L E A R N F R O M

T O G u I D E Y O u RS u C C E S S F u L O D Y S S E Y

06

rEtail channEls

CatalogsConvenience Storesdeep discount Supermarkets (e.g. aldi)department Storesdiscount Clothing Storesdollar Storesdrug Storeshome improvement StoresMall/Strip MallMass Merchandisers/SupercentersMobileonlineSupermarketstV Shoppingwarehouse Clubs

Specialty Stores » Beauty » Books » Clothing » electronics » food » greeting Cards » home » liquor/wine » office Supplies » toys » Vintage/reuse » Vitamins/nutrition

lEading indicator catEgoriEs

ClothingComputer/SoftwareCosmeticselectronicsfashion accessoriesfood & groceryfood - Producefood - take-outfood - eating at restaurantsfragrance

greeting Cardshair Carehome décorhome furnishings/appliancesotC MedicationPet Supplies (food & accessories)Skin CareVitamins & Supplementswine/liquor

KEY shoppEr sEgmEnts

AGE GENDER INCOME ETHNICITY (women)

18-3435-5455-70

Menwomen

<$25K$25K - <$40K$40K - <$75K$75K - <$100K$100K +

african americanCaucasianhispanic

+ 5 SHOPPER SECTORS

07

intErviEW mEthod national internet Survey

SAMPLE 1950 shoppers nEW largEr samplE in 2010 » 1530 women - primary shopper in the household » including quota samples of:

- 150 hispanic women - 150 african american women

» 420 Men - who do some household shopping

HOuSEHOLD INCOME $25,000 - $100,000 +

AGE 18-70

QuEstion topics trended 2006, 2008, 2010 » Shopping Behavior: number of shopping trips/week » Shopping Channels: last week, last 3 months » Category Purchase Behavior:

- Spending vs. year ago - Channels shopped

attitude and Values that influence shopping life. » e.g., spending confidence, trade-offs in spending, health and wellness.

recession/recovery » how long their “personal recession” will last » how do they “cluster” into shopper personalities

action stEps recovery Values » how are shoppers changing » what are their new values

prEsEntation Customized to each client’s industry and issues

TABLE OF CONTENTS

ABOUT US 5

OBJECTIVES & METHODOLOGY 7

EXECUTIVE SUMMARY 11

SECTION 1: HOW WOMEN SHOP• Emotions and Attitudes that Influence Shopping• Shopping Behavior• Spending on Leading Indicator Categories• Where Categories are Purchased “Most Often”

2728374652

SECTION 2: HOW ETHNIC WOMEN SHOP• Emotions and Attitudes that Influence Shopping• Shopping Behavior• Spending on Leading Indicator Categories• Where Categories are Purchased “Most Often”

6566737780

SECTION 3: HOW MEN SHOP• Emotions and Attitudes that Influence Shopping• Shopping Behavior• Spending on Leading Indicator Categories• Where Categories are Purchased “Most Often”

83849198

101

SECTION 4: SHOPPER PERSONALITIES• Emotions and Attitudes that Influence Shopping• Shopping Behavior• Spending on Leading Indicator Categories• How to Use the Shopper Personalities

103107114118120

APPENDIX 121

© 2010 WSL STRATEGIC RETAIL, no part of this publication may be reproduced or redistributed without written permission from the publisher.

EXECUTIVESUMMARY

© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher

COPYRIGHT 201012How AmErICA SHopS® 2010 mEgATrEndS STUdy

The Odyssey Begins to the New Retail World Executive Summary


The OdysseyChallenges

OpportunitiesWhite Spaces

Two years ago, in the 2008 edition of How America Shops® MegaTrends, we warned that shopper anarchy was imminent (thus the title of the study “Anar-chy.”) The signs of disillusionment with a life of shopping, buying and consuming were evident even then. Prices on everything were going up. Home values and stocks were going down. Savings were non-existent; credit was maxed out. American shoppers were stretched too thin. And then the house of cards col-lapsed (aka the House of Lehman). In How America Shops® 2008 we didn’t predict the Great Recession but we did predict the end of the shoppers’ passion to consume.

THE odySSEy To A nEw rETAIl world BEgInS

The difficult journey begins now as the economy teeters toward recovery.

After almost a decade of calamitous change that has transformed the way Ameri-cans live and shop, this recession was the final curtain call. Americans changed how and where they shopped, first through necessity, now through choice. They now no longer live to shop, they shop to live. They have a new set of shopping values that are entrenched, certainly for the near term.

As a result, there is lots of white space emerging that reveals new challenges (as established channels, retailers and brands are tested), new opportunities (as new channels, retailers and technologies emerge) and new means of growth (as new shopper values materialize). In order to succeed now, companies must under-stand new shopper attitudes, values and the new Terms for Success for brands and stores and shoppers.

COPYRIGHT 2010 13How AmErICA SHopS® 2010 mEgATrEndS STUdyThe Odyssey Begins to the New Retail World Executive Summary


The Top 7 Terms for Success for Your Odyssey

There are 7 Truths upon which companies need to (re)build shopper strategies for the coming years. Ignore them at your peril. Understand them and white spaces of opportunity emerge.

01 The end is not near

When will the recession end? If we knew that we’d be billionaires (and this report would need a new author). What we do know is when shoppers think it will end.

53% of women feel the recession will last at least another 1 to 2 years.43% think it will take at least another 3 to 6 years or more.

So, for all intents and purposes, it will be the end of 2011 before we can even think of recovery. (Takes your breath away.)

How long do shoppers think it will it take for their personal finances to improve? Here’s some good news.

40% feel by the end of 2010.47% feel it will take at least 2 to 3 years – or they have no idea how long.13% say they really were never affected by the recession.

Worth noting: women, men, the affluent and all ages of shoppers agree on this.

02 There is no pent-up demand - less is really more

The 2009 holiday shopping season nixed the idea that shoppers had over a year of pent-up demand that would send them rushing to the stores to splurge on gifts for themselves and each other. In fact, shoppers are quite okay spending less.

“Less is more” has become a fundamental value shift.

63% of shoppers don’t want to buy as they did before. Even the affluent.




03 Smart shopping rules

The obsession with paying less is now nearly universal.

70% of women agree “It is important to get the lowest price on most things I buy.” + 6 points since 2008 and + 17 points since 2004.

Smart shopping is also about the shopper being absolutely assured she’s get-ting the best value for her money --- whether she’s buying diapers, cereal or a designer handbag. As a result, she’s willing to stop, pause, rethink her purchase before she puts an item in her basket – or will take an item out of her basket at the checkout if she thinks it’s not really worth it.

The “cautious pause” we defined six years ago, is now part of her everyday shopper psyche and values.

64% of shoppers ask themselves “Is this a smart use of my money?” + 8 points since 2008 and +16 points since 2004.

Money has become more important than time (or gas, for the moment).

53% of shoppers will go further to shop in stores where they can save money, - 5 points from 2008 when gas prices were higher and +10 points since 2004;

Only 19% will pay a bit more to shop in stores where they can get in and out quickly, –15 points since 2004.

04 Fear still reigns

Whether your frame of reference for an “odyssey” is the mythical Greek journey or Star Wars, the perils are the same — fear of the unknown and continues to affect how people feel about shopping and spending.

47% of women are uncertain about the future, so 52% are staying out of stores where they are tempted to overspend. (The same is true for 1/3 of those earning over $150k.)

32% constantly worry about how much debt they have, and 25% have promised themselves they will never get into such debt again. (While this is not as big an issue for those with incomes over $150k, still 17% and 14% respectively are worried about the level of their debt.)



05 Premium brands are in peril

We wish there was some good news to report here, but we don’t see it. Shop-pers’ willingness to pay more for brands is shaky. As their spending power has declined, more have opted for lower-priced brands that let them save money, and not enough believe paying more actually ensures a better product.

50% now choose lower priced brands, +16 points since 2004.Only 31% agree that trusted brands are worth paying more.

06 Many like to shop (still); many don’t

The core of women who enjoy shopping is unchanged, even during these years of learning to spend less.

42% of women enjoy browsing, the same as in 2004 (39%).38% agree they still love to shop, even though they are buying less of everything.

On the flip side, as many women have found other ways to use the time they once spent shopping.

40% like spending less time shopping and more time doing other things.

07 Demographics matter less now

Throughout this report it is startling how little demographics matter. The rich are not as different from everyone else (at least emotionally); and overall, the young have become as conservative in their attitudes toward shopping and their willing-ness to spend as older shoppers.

25% of shoppers with +$150k incomes say their finances were not affected by the recession, however . . . one-third are cutting spending, avoiding places where they are tempted to over-spend, and are content buying less.

50% or more of all age and income groups feel the recession will be around at least 2 more years, and agree it will take them at least 2 more years to recover their financial stability. (One difference is that more of those 55+, whose prime earning years are behind them, have no idea when, or if, their finances will recover.)




Shopping Trends 2010

TrIpS & STopS InCrEASE AS SToCkIng-Up dEClInES

Women are trying to live within their budget --- which means resisting the temptation to stock up if they can’t pay for it. Stocking up less means more trips to replenish, and going to more stores to find the best sales and the lowest prices. Therefore, the new, smart and thrifty shopper is making more trips in a week to more stores.

In a 3-month period women have trimmed their shopping portfolio a bit, but not much (8.2 channels now vs. 8.6 in ’08), but they are controlling their spending when they are in those stores.

wHITE SpACES:

The Internet redefines channel choices. department Stores and malls slip - again.---- and lots more.

mass merchandisers/supercenters and Supermarkets are still the top two chains shopped in 3 months. In 2008, Supermarkets had begun to regain their position against the mighty Supercenter. They have now solidified it during the reces-sion as a) more women shop for ingredients to prepare food instead of buying take-out, and b) avoid the Mass Merchandiser where they can be tempted to overspend on the wide array of everything beyond food.

A sign of the times is that dollar Stores have moved into the #4 slot, just ahead of department Stores. (It’s not that Dollar Stores are gaining shoppers, it’s that Department Stores are losing so many.)

online shopping has taken a big leap forward. Once all about convenience and selection, the Internet has become the go-to channel to find lowest prices and coupons.

• On a weekly basis, 24% of women now shop Online (+14ppts since 2008). That makes the Internet #3 behind Mass Merchandisers and Supermarkets (both at 64%) weekly, and ahead of Drug Stores (20%) and Department Stores (18%).

AVERAGE # OFSHOPPING TRIPS

AVERAGE # OFOUTLET SHOPPED

3.9 3.6 3.7

WEEKLY SHOPPING TREND(BY TOTAL WOMEN)



• In 3 months Online shopping took a big +13ppts leap over ’08 to 47% of women shopping the Internet in the last 3 months.

Specialty Stores overall are holding during the recession. In many categories they are a mix of lower priced big box stores, like Best Buy or Old Navy as well as higher priced stores like Abercrombie & Fitch.

• However, Specialty Stores for Books, Greeting Cards, Home Furnishings, Office Supplies and Vitamins have each declined by 3 to 5 ppts. vs. 2008. While 3 – 5ppts may not seem a lot, it reflects a loss of shoppers who are now focusing their trips on places where they can get a lot done under one roof, save money, and not be tempted to overspend.

CHAnnElS SHoppEd In THE lAST 3 monTHS

ToTAl

2008 2010

Base: Total Women (1337) (1532)

% %

Mass Merchandiser 83 74

Supermarket (Net) 76 71

Drug Store 64 67

Dollar Store 54 51

Department Store 54 47

Internet (Net) 34 47

Warehouse Club 40 42

Home Improvement Store 49 42

Discount Clothing Store 24 25

Enclosed Mall 39 32

Specialty Stores (net) 76 73

Office Supplies 28 24

Pet Supplies 25 24

Beauty Care 24 23

Clothing Store 23 22

Liquor/Wine 18 22

Books 26 22

Home Furnishings 24 19

Electronics 19 17

Greeting Cards 20 17

Food n/a 14

Toys 15 14

Vintage, Used or Pre-Owned Products 8 9

Vitamins And Nutritional Products 10 7

AVErAgE # of oUTlET SHoppEd 8.6 8.2




wHITE SpACES:

mass merchandisers (particularly walmart) are challenged on many fronts in the new retail world.

Mass Merchandisers may be shopped by the most women (even the most afflu-ent) but they are down 9ppts vs. 2008, and two channels will continue to siphon off Walmart’s core shoppers in this New Retail World . . .

• Almost 70% of Walmart’s core shoppers, those with HHI under $40k, are in the Dollar Channel in 3 months; 1/4 are there every week, which is up vs. 2008.

• A channel we added for the first time this year, Deep Discount Grocery stores like Aldi and Sav-a-Lot, attracts 15% of lower income households in three months -- and that’s with limited distribution. As these chains expand Walmart is further threatened.

online is also a threat that Walmart executives are right to lose sleep over this.

• What to watch about Online shopping is where shoppers are going. Bricks and clicks retailers like Walmart, Target, Macy’s, JC Penney’s, Costco and the Drug chains have 7% or fewer of their shoppers buying from their Online sites on a 3-months basis.

• In the same 3 month time period, 57% of Online shoppers have shopped amazon.com.

SpEndIng CUTS for moST “lEAdIng IndICATor CATEgorIES” TEll THE pAInfUl STory of THE rECESSIon-- and reveal what’s worth it (or not) in the new retail world

For the past two decades, How America Shops® has determined that certain product categories are predictive Leading Indicators of what’s important to shop-pers – what they will spend on and what has hit their frugal nerve.

Many Leading Indicator Categories have been tracked since 1989, including Beauty Care, Clothing, Fashion Accessories, Food, Greeting Cards, Home Deco-rating, Over-the-Counter Medications. Other categories have been added to the survey over the years to reflect social and economic trends, such as, Computers, Electronics, Home Furnishings, Pet Supplies and Wine & Liquor.

This year we added categories that will help us monitor shoppers’ commitment to health and wellness, specifically, Fresh Produce and Take-out Food. We also added Eating in Restaurants, which has been one of the hardest hit categories in the recession, and will be a Leading Indicator of when shoppers feel they can break out and spend more.



In the 1990s, most of the Leading Indicator Categories were showing net gains in spending (that is the difference between the percent of shoppers spending more and those spending less.) Since 2006, there have been mostly net losses with increases only in essentials like Food.

This 2010 study shows accelerating declines as the recession tightened its grip. Many categories that held steady in 2008 are showing large-scale cuts in 2010. Those that were being cut in 2008 have been cut even more severely in 2010.

wHAT’S Up rEVEAlS A nEw HEAlTHIEr mIndSET - physical and Emotional (pets again)

• Fresh Produce takes the lead at +19ppts net gain between those spending more vs. less, which sounds like a win for healthier eating.

• Food in general is +4ppts. When we asked shoppers why their spending on Food is up, 47% say it is because of rising prices, and another 19% are using more since they are eating out less.

• Vitamins, at +4ppts, is another win for wellness, as women buy more to stave off trips to the doctor and medications they can’t afford.

• Pet Supplies, a consistent winner, is +9ppts, a more modest gain than the double-digit net growth of prior studies, but still an ongoing reflection of the emotional importance of this category to American families.

wHAT’S down rEflECTS THE dEpTH of THE rECESSIon

Literally every other Leading Indicator Category is down, and down deep, a perva-sive, if not unexpected, theme in 2010. (Remember, it’s an Odyssey.)

The biggest cuts were made in categories that helped drive retail growth over the last years.

• At the top of the list: Fashion Accessories (-46ppts), Clothing (-39ppts), Home Furnishings (-39ppts), Restaurant Meals (-39ppts), Electronics (-38ppts), Computers (-36ppts), Fragrance (-36ppts) and Take-Out Food (-35ppts).

• Less impacted (although it’s only relative) are: Cosmetics (-28ppts), Greeting Cards (-20ppts), Skin Care (-18ppts), Wine & Liquor (-17ppts), Hair Care (-16ppts) and OTC Medications (-8ppts).

Seven of these categories (Hair Care, OTC, Clothes, Liquor/Wine, Greeting Cards and Cosmetics) were holding steady in 2008. Not any more. Nothing was im-mune to cutbacks, trade downs, brand switching, or just plain not buying at all.




Demographics show very few differences. The most affluent women have not scaled back their spending as much as the least affluent in Cosmetics (-12ppts vs. -27ppts), Skin Care (-3ppts vs. -21ppts) and Vitamins (+9ppts vs. -4ppts). But that’s all.

All in all, no category was sacrosanct.

wHErE lEAdIng IndICATor CATEgorIES ArE pUrCHASEd “moST ofTEn” rEVEAl wHITE SpACES EmErgIng

How America Shops® asks shoppers where they shop “most often” for each of the Leading Indicator Categories. For the most part, the top 3 retail channels for each product category in 2010 are the same top 3 channels we reported in 2008. However, there are several trends that reveal both the impact of the recession and the new shopper mindset.

• While the growth in Internet shopping hasn’t propelled the Internet to the “most often” shopped channel in any category, Online shopping in many categories has grown dramatically. Online has narrowed the gap between Specialty Stores and the Internet for Computers, and continues as a solid #3 for Electronics. In eight of the categories, at least 20% of women shop online regularly for categories such as Cosmetics, Skin Care, Fashion Accessories and Home Décor.

• Department Stores still hold their position as the #1 place to shop for fashion but have lost ranking for Cosmetics and Skin Care. In Cosmetics they now rank #3 after Mass Merchandisers and Drug Stores (they were #2); in Skin Care #4 after Mass Merchandisers, Drug Stores and Specialty Beauty Stores, (they were #3).

• Specialty Stores are losing position to cheaper channel alternatives like Mass Merchants in Computers and Pet Supplies thanks to a combination of lower prices and – in the case of Computers – an improved brand offering by Mass Merchants in the category.

dIffErEnCES THAT mATTEr lESS - dEmogrApHICS

At this point in this Executive Summary we would usually include the key findings that differentiate male shoppers, and African-American and Hispanic women. The big finding in 2010 is that there are very few differences to report; the news is in the similarities.

men

Historically men are usually more optimistic than women and male attitudes in 2010 have not been as deeply impacted by the Great Recession as were those



among the fairer sex -- but we are really splitting hairs. Here are a few examples:

• The number of men who say it’s “it’s important to get the lowest prices on most things I buy” is up 3ppts over 2008, to 62%. Among women that statement gets agreement from 70%, up 6ppts since ’08. A difference, but not by much.

• You might think fear wouldn’t affect men as deeply as women given their greater optimism, and you’d be right - to an extent. 38% of men say they’re “cutting spending because the future is uncertain” – something that affects 47% of all women.

• However, the number of men who really got into real trouble during the recession is identical to women: 32% of men “constantly worry about the amount of debt I have,” same as women.

• Where we do see that wonderful male optimism is in the 70% of men who believe the recession is over or will be over within a couple of years at most compared, to 57% of women. (Thank heavens for that difference.)

• However, while men may be more optimistic about the future than women, they’re responding to the recession by making similar drastic cuts across all categories, the same as women.

African-American & Hispanic women

The attitudes of African-American and Hispanic women are similar to Caucasian women. Where there are differences they are more related to income than ethnic attitudes.

• Women of all backgrounds are equally price conscious, and similar proportions among each ethnic group say they’re more likely to sacrifice their usual brand for a lower-priced alternative if it means they can save money (49-52%).

• However, significantly more African-American women believe that “trusted name brands are worth paying more for,” 54%, vs. 28%-31% of Caucasian and Hispanic women.

• More African-American women worry that “I got into so much debt that once I pay down my bills I will never do that again” --- 40% vs. 20% of Caucasians and 29% of Hispanics.

• However, African American women are more optimistic about their recovery from the recession – 59% believe their situation will improve by the end of 2010 vs. 35% of Caucasian and 45% of Hispanic women.




Shopper Personalities

Now that demographics matter so little, you will need a more holistic, 360° view of shopper personalities in order to succeed. Here are the critical personality dimensions that frame the shopper mindset moving forward.

• living within your means. People who always live within their means came through the recession with fewer scars than people who live large and with debt. It doesn’t matter if they earned $50k or $100k, it was the degree to which they “lived within their means” mindset that determined how they experienced the recession.

• The shopping gene. Some people shop a lot because it is in their blood -- they love it; others shop a lot because hunting for bargains is the only way they can get by – bargain hunting is in their blood. Regardless, they love to shop, and do it a lot.

Other people do not like to shop. They are in stores and do buy, but they can’t be bothered to shop “smart” – it takes too much shopping to find the lowest prices or switch brands. They love the Internet because it helps them avoid stores. Whether they are affluent or not doesn’t matter, they missed the shopping gene.

24%

17%

20%

18%

21%

MISERABLE MONA (18%)Hurt by the recession, always struggles, but that’s her lot in life. Why shop if you can’t buy?

SHOP-A-LOT SUE (21%)Hurt by the recession, but determined to shop smarter to get what she wants.

CHIC CHIC CHARLOTTE (17%)Spared by the recession. A devoted (affluent) shopper,

but with a new reserve about excess consumption.

I’LL PASS PATTY (20%)Never joined the

shopping culture so the recession doesn’t hurt

much. Why would anyone want to shop?

BUBBLE BARBIE (24%)Hurt by the

recession, not much money, but a girl’s

just got to shop.

31%

13%

21%

17%

19%

MORRIS

STU

CHARLES

PETE

BOB

WOMEN MEN

5 SHoppErS yoU wIll EnCoUnTEr on yoUr odySSEy To THE nEw rETAIl world



To define the SHoppEr pErSonAlTIES, we segmented women and men based on their responses to a series of questions and attributes, for example, How long will your personal recession last? Do you agree that you always spend within your means? Does spending on a well-known brand make you feel good? Do you go online looking for discounts before you shop?

We confirmed how little gender and ethnic background influence a shopping personality. While the How America Shops® sample ranged from 18 to 70, the average age of each personality falls between 40 and 48. Household size is simi-lar, and 60% to 70% of each segment is employed. The mean household income range is broader, $60k to $101k, and while fear and worry about debt correlate to income, shopping behavior correlates less so.

The 3,000 ft. overview of the SHoppEr pErSonAlTIES looks like this.

Meet Shop-a-lot Sue (21%) and miserable mona (18%). If you only focused on demographics you would see them as the same people: they have the lowest mean income of the segments at $60k and the least education (high school/some college.) They are both the Walmart core shopper, however, their reactions to the recession and to shopping are very, very different. When it comes to handling their debt, dedication to being a smart shopper, and their attitudes about life and shopping, these two are polar opposites.

Shop-a-lot Sue loves, loves, loves shopping – and is darn good at it, too. She and her mate (Shop-a-lot Stu) see their low income as a challenge, not a deal break-er. Sue knows she doesn’t have much to spend, so she shops smart, which let’s her buy more. She’s Online more than most, and is often in the Mass Merchandis-ers (Walmart), Dollar, and Deep Discount stores. She’s given up her aspirations for big name brands and is okay with less. She’s not so worried about debt; she will figure out a way to stay ahead of it.

miserable mona, on the other hand, is so jaded by her financial situation that she finds no pleasure in shopping --- why would you want to shop if you can’t buy anything? She either can’t be bothered or can’t figure out how to be a smart shopper – even when it would save her money. Making ends meet is a constant struggle. Miserable Mona (and miserable morris) headed into the recession with debt, and dread sinking deeper. She wavers between staying out of stores so she won’t overspend or just accepting her fate as debt-ridden and deprived. Either way she doesn’t like to shop and she shops least of all the personalities. Miserable Mona is also a Walmart, Dollar and Deep Discount shopper, but she doesn’t see Online as a tool to help her.

I’ll pass patty didn’t get the shopping gene. She is apathetic about shopping, it is a means to an end. She has above average income at $90k and she (and her male counterpart pete) live within their means so they were not terribly affected by the recession. To her, smart shopping is no shopping. Low price is important, but not if it means having to shop around. No surprise, more I’ll Pass Pattys shop Online in order to avoid brick and mortar stores.




Bubble Barbie has lived the recession in a bubble, trying to ignore it all and continue to shop, which is what she loves to do. Her income ($72k) is right in the middle, and the recession has been hard on her, leaving her worried about debt. Although she should be, she is not a smart shopper. She’s in denial about the ‘need’ to clip coupons or shop online for better deals. She’s still browsing her stores and wanting all her “stuff.” Retailers love to see her come into their store – and she doesn’t disappoint, she’s there often. Her male companion (Bubble Bob) doesn’t love to shop quite as much, but he doesn’t spend within his means and is worried about debt. He continues to shop as he always did because it makes him feel good.

Chic Chic Charlotte (along with Charles) has been sheltered by a higher income (mean $101k). She loves to shop and does so more than any of the other seg-ments, making the most trips to the most stores. Shopping smart isn’t high on her list because she feels she doesn’t really need to be so concerned about saving a few dollars. Though she doesn’t have to worry about debt that doesn’t mean she’s been unaffected by the recession. She has re-thought her spending and decided she doesn’t need all the stuff anymore. She’ll shop, but will buy less. Her new shopping mindset will be the undoing of department stores.

How to Use the Shopper personalities

Often success is about who you know, which is why we knew you would want to meet these women – and men. Now that you have met them, here’s what to do with them.

1. Know which personalities are in your franchise. There is a strong case here for looking beyond age and income, and even gender, to know your shopper.

2. Note the similarities. The Great Recession has made each of the five price conscious and coupon happy. Promoting price may have been déclassé in better times for some upscale categories, but it is now simply smart shopping. Upscale brands may benefit from a more subtle approach to price than mass market commodities, but Chic Chic Charlotte responds to the same message as Shop-a-Lot Sue -- an opportunity to save money.

3. Value stores, from Walmart to Dollar General have two different shopper personalities walking through their doors – downtrodden, Miserable Mona and can-do Shop-a-Lot Sue. Take the risk of marketing to the more upbeat Sue, with attractive stores and the aspirational merchandise she’s looking for. Even Walmart has discovered that stores don’t have to be dark and cluttered to reassure shoppers that you have lowest prices. There’s nothing wrong with adding a little Miley Cyrus cachet to everyday low price.



White Spaces of Opportunity

4. Bargain shoppers like Shop-a-Lot Sue want coupons, sales and promotion codes. As a bargain hunter she will return again and again to the places that reward her hunt. Make her day, and let her find the bargains on your store or site and you will be “bookmarked.”

5. Bubble Barbie is the best reason to keep doing attractive displays of new products that stop her in the aisle and add more to her basket. She is wandering the Malls, the Mass Merchandisers and Drug Stores looking for affordable things to add to her collection. Sales and discounts are good, but not necessary for her to buy. Fortunately, she is the largest personality segment (24%), and if you have her you are fortunate.

6. The more affluent (Chic Chic Charlotte) have developed a case of retail guilt. Many stores and brands want her because of her affluence, but she is not as spend-thrift as she was in the ‘90s. She doesn’t want to have to go online to find a sale, but she will if she must. Better to reassure her that you are offering her value, which is the only way to get her to spend to the max.

THE odySSEy BEgInS - ACTIon STEpS for yoU

The emerging retail world may look familiar but it is not. We’re about to embark on a journey into the retail unknown. An odyssey of almost mythic Greek propor-tions. Where shoppers are totally in control. Where purchase decisions begin at a different point. Where “bricks” and “clicks” merge seamlessly with mobile. Where “clicks” define the road ahead. New white spaces are emerging upon which we can/will/must write a new shopping history. The journey begins now.

The less is more world. “Less is more” has dramatic implications for retailing at large and you need to find your balance here. Less is more raises a fundamental question: Must companies tamp down their expectations to match the shoppers’ new expectations? Must we shrink our businesses, reduce store size, cut back the number of stores, our inventory, our SKUs, new product introductions, price points? Yes and no.

Yes…it’s critical to rethink the practices of opening stores willy-nilly, introducing new products (without innovating), increasing prices (without adding inherent value).

No… it’s less about tamping down expectations and more about redefining them to meet the expectations of shoppers who now demand more – much more – if you want them to spend beyond the basics, to trade up and immerse themselves in new shopping experiences.

Be Bold or fail. Tweaking, line extending, and launching me-too items will be a losing strategy on two counts. First, retailers are taking marginally different prod-ucts off the shelf, not adding them, and second, shoppers are over “new” and premium price unless it is really new and has real added values.




restore Value - romance the Brand. While shoppers are focused on being prac-tical and thrifty, they will, at the same time, spend big on products that they feel are sensational --- UGGS, Kindle, iAnything (Pods, Phones, Touch). It’s all about polishing the brand image, not taking it for granted. Without the brand image, trading down will win.

Innovate discounting. Lower-priced options, private label, better value sizes, coupons, price-checking -- anything that helps shoppers manage their weekly spending more effectively will remain on their list. Anything premium priced, even if only a little – product, service or retailer – will lose shoppers unless its value is clearly stated, and seen as worth the price. Fill the white space with meaningful rewards.

Be mobile. This easier access to the Internet will make cyberspace about so much more than buying. It will play a larger role as the place where people go to find coupons, promotions, lowest price, information they trust – all at their finger-tips. Mobile technology is fast enhancing the shopping experience, customizing it intimately in ways many have yet to understand, forcing traditional retailers to rethink how they communicate, connect and sell everyday.

re-think the website -- Again. The physical store will be transformed in this new white space. That’s not to say there will be no more bricks and mortar. But a retailer’s website cannot be an add-on. It will become (as many already are) the #1 store, the most profitable store, and in many cases the flagship store, while the physical store will become the showcase for testing, trial, experience -- the sec-ondary space. As a result, how brands are distributed is being transformed right now. Think about the revolution in the music and the book industry as a guide to this new retail world. (Where’s the store? Why the store? Why is it worth it?)

Be a Safe place. While fear and uncertainty remain, retailers and manufactur-ers need to make all shoppers feel safe, assure them that the brands, services and experiences offered will help them on the road to recovery. Reward them for smart shopping behavior. Build their trust for the long term.

Shopper personalities. The shopper personalities all walk through the same re-tail stores, but see the experience differently and buy differently. The opportunity then is to create holistic retail experiences and connections that provide the joy, the emotional reward but without the guilt. It gets back to restating value. It’s not about just another place to shop, another thing to buy, it’s about why this place, why this thing. Why it’s worth it.

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